Is cloud-based security really cheaper?

Vendors hope subscription models and removing need to manage and update software, hardware will be attractive, but the jury's not in on cost.

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Businesses in new study were five times more likely to have decreased spending on managing security over three years.

As part of its marketing strategy for selling to small and medium-size businesses (SMBs), Microsoft this week released the results of a study on the use of cloud-based security. The survey of SMBs, whether from Microsoft or other vendors, found that they were five times more likely to have decreased spending on security over the last three years, as a percentage of their overall IT budget. They also spent 32 percent less time managing security than those that used on-premise software.

SkyWire, which started using Microsoft's cloud-based security service Windows Intune 14 months ago, develops and sells web-based marketing tools across several industries, so it makes sense the Internet company would adopt cloud-based security.

The switch from on-premise software cut has cut its security costs from $90,000 over the last six months, including IT staff, to $330 a month, which is the annual subscription cost for Intune, Castleberry says. Intune protects the company's laptops, desktops and mobile phones from malware, as well as provide updates to Microsoft software.

All of the applications the company uses and sells are tapped as services over the internet. Internally, the company uses Microsoft Office 365 for office productivity, email and calendars. SkyWire's sales people use the software maker's online customer relationship management (CRM) system.

"Adopting a cloud-based security solution was something that we had actually been waiting for," Thomas Castleberry, chief operating officer for the 35-employee company, said Friday. "We'd been looking to retire some of our existing internal anti-virus, malware and Windows update servers."

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SkyWire, which had £1.3 million ($2 million) in revenue last year, is the exception when it comes to small businesses, which do not spend much on security in general, according to market researcher Gartner. But because everything SkyWire does is on the internet, security was not something it could treat as an afterthought, which is often the case in small offices with only a few employees.

Of course, it's not unusual for vendor-commissioned studies to be skewered toward the benefits of the products and services they sell. "Magically, when a company selling product or service X funds a survey, the survey always seems to provide [that the] product or service X reduces costs, increases security, etc.," Gartner analyst John Pescatore said in an email.

But given the slow adoption of security by small businesses, vendors are hoping the cloud will prove attractive by delivering protection on a subscription basis, while removing the hassle of managing and updating software and hardware.

For SkyWire, the switch wasn't difficult because it was already heavily invested in internet technology in selling its own web services, so it didn't have to hire people familiar with cloud security or increase bandwidth, Castleberry said. "For us, there weren't a whole lot of adjustments."